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Sen. John Carlson, R-Bemidji, believes that once the $6.2 billion budget gap is solved, the state should set aside three months' expenses in a rainy day fund. He spoke Saturday to the Beltrami County Republican Convention. Pioneer Photo/ Brad Swenson

news Once Minnesota finds its way out of a $6.2 billion budget gap, it should lay away $4 billion in a rainy day fund, says Sen. John Carlson, R-Bemidji.
Once the business cycle hits an upturn, and Minnesota's current 37 different taxes begin collecting more revenues, Minnesota should sock away at least...
Bemidji, 56619

Bemidji Minnesota P.O. Box 455 56619

2012-08-06 12:35:21

Once Minnesota finds its way out of a $6.2 billion budget gap, it should lay away $4 billion in a rainy day fund, says Sen. John Carlson, R-Bemidji.

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Once the business cycle hits an upturn, and Minnesota's current 37 different taxes begin collecting more revenues, Minnesota should sock away at least three month's operating expenses in a rainy day fund, waiting for the next business cycle downturn, he said.

"Whose money is it?" Carlson asked Beltrami County Republican Convention goers Saturday morning. "It's yours. It's not the state's money. ... We must get beyond the notion it's the state's money. The state doesn't have any money."

Once the rainy day fund is established, "any revenue beyond that needs to go back to the taxpayers," Carlson said. "Once we fix the structural problem (with the budget) it should be fixed. It should not be seen as the candy dish of which now we can pluck more out of."

Both Carlson and Rep. Dave Hancock, R-Bemidji, say that the current budget will raise an additional 5 percent, to $32 billion, which is enough for the next biennium. Gov. Mark Dayton, a Democrat, last week proposed a $37 billion budget with more than $4 billion in new taxes.

"I truly believe that $32 billion is enough," Hancock told the 47 convention delegates. "We have to change the way we approach government."

Asked whether legislative leaders and Dayton will be able to compromise on a budget, Hancock said, "That's the $64,000 question.

"In truthfulness, is there compromise in between?" Hancock returned. "And is compromise always good? Stand your ground is what I'm saying. It might be a long special session, not because we want to be confrontational, but I truly believe that $32 billion is enough."

Carlson said Minnesotans must separate the wants from the needs, and fund only the needs.

"We are at the bottom of the business cycle, that's a cyclical program," he told delegates. "Beyond that, we have a structural problem. The structural problem that Minnesota has is that it has a spending problem."

That spending problem can be fixed, "right now, today," Carlson said. "We have a unique opportunity to take advantage of both a cyclical downturn and and a structural downturn and go back to the basics of government."

That means going back to the government basics of public safety, infrastructure and taking care of the most vulnerable in society that need protection.

"We have to go back to those tenets," he said. "Those are the needs of our society, and we need to do those and do them very well. Beyond that we have many wants, and what we have to say now is our opportunity to cut back on the wants."

The voting public said they wanted spending priorities fixed, Carlson said of the Nov. 2 election. "Please help me to tell the legislators we need to fix the spending problem. Once we fix the spending problem, we need to get the rainy day fund."

The GOP's call for a $32 billion budget represents a 5 percent increase over the current biennium, Hancock said, while Dayton's proposal is a 22 percent increase.

"I think most businesses in the area, most families, if told they would get a 5 percent increase in their income, would be pretty happy with it," he said. "Our approach to government is rather than make a budget based on always covering costs, why do we not look at what our income is?"

:Prioritizing spending is key, he added. "We're working on a budget that will live on that $32 billion."

Increasing spending by $7 billion and raising taxes $4 billion, as Dayton would, "I can hardly call a balanced budget," Hancock said. "Where do the wealthiest live? Anywhere they want. ... That is what will happen. There is a tipping point, a curve, in which you tax so much ... they move, they expand elsewhere."

U.S. Rep. Chip Cravaack, R-8th District, who upset long-term Rep. Jim Oberstar, DFL-8th District, last fall, was to have keynoted the Beltrami GOP event Saturday, but was still in Washington, D.C., voting on a continuing resolution to fund government to Oct. 1.

Beltrami County GOP Chairman Ken Cobb said Cravaack will headline the party's banquet May 6 in Bemidji.